Marriott: HR Practices Result in Engaged Employees and Satisfied Customers

If you have traveled, you probably have seen or stayed at a Marriott hotel. But did you know that Marriott owns few hotels? Most are owned by real estate partners, and Marriott manages or franchises them. Marriott is doing well in a competitive industry. Its 2014 revenue and net income ($13.8 billion, and $753 million, respectively) were at record levels. Marriott reported net income totaled $244 million in the fourth quarter of 2016, a 21 percent increase over 2015 fourth quarter net income. To stay relevant in the hotel industry, Marriott has added new properties around the world and is reinventing itself to appeal to tastes of the new Millennial generation of travelers. Marriott purchased Starwood Hotels and Resorts and has added three new brands, Moxy Hotels, for budget-conscious travelers, and AC Hotels and Edition brand for more sophisticated travelers. Also, Marriott is changing room design to reflect Millennials’s tastes and preferences: big comfortable beds, large televisions, large public lounges, and instead of traditional room service, online ordering and food delivery.

How Marriott manages its employees plays a key role in its financial performance and customer satisfaction. Its practices are based on the principle “Take care of associates and they will take care of customers.” “We put people first” is one of Marriott’s core values. Marriott has been on Fortune magazine’s “Best Companies Page 64 to Work For” list for all 18 years the list has been in existence, a distinction shared by only 11 other companies, including Publix, Whole Foods, Nordstrom, and REI. The company has more than 200,000 employees who work in hotel properties around the world. The work isn’t necessarily sexy or sophisticated. Most employees, who are known as “associates,” work helping guests, serving meals, and cleaning rooms. Housekeepers represent the largest category of associates, and 85% of associates earn an hourly wage. Despite the routine nature of the work and demanding customers, associates often refer to their co-workers as “family,” and many stay in their jobs for many years. Marriott’s general manager’s tenure is 25 years—much greater than the industry average. More than 10,000 employees have worked at Marriott more than 20 years.

Marriott emphasizes hiring friendly people who can learn through training. For hourly associates, the company screens for interpersonal skills, dependability, and positive disposition. Employees’ opinions matter. At every hotel, each shift starts with a 15-minute meeting during which employees share updates and get motivated for the day’s work. The meetings often include stretching, music, and dancing. Employee benefits also contribute to making Marriott a desirable company to work for. The benefits include flexible scheduling; an employee assistance phone number; health care benefits for hourly employees if they work 30 hours a week; and discounts on room rates for employees, families, and friends. Employees working at company headquarters have access to a gym, a dry cleaners, a gift store, and day care. The company holds a celebration of excellence each year that recognizes outstanding employees who are flown in for the event. The best benefit may be the opportunity that all employees have to grow their careers.

Many top executives started as hourly employees working as housekeepers, waiters, sales people, or security guards. Employees are given opportunities to explore career paths and learn through job experiences. Mentoring from senior employees is common. Bill Marriott, the company’s executive chairman and CEO for 40 years until stepping down, believes happy employees result in lower costs. Happy employees mean Mariott has lower turnover and less need to train and orient replacement employees, and an experienced workforce provides better customer service. Marriott regularly surveys its employees to measure their engagement. The results show that in hotels where employee engagement is higher, customers who experienced a problem were more satisfied with the solution.